?

[This message has been edited by FrugalFiero (edited 11-08-2010).]

On topic: did anyone watch Jesse Ventura's Conspiracy Theory: Wall Street?


http://www.youtube.com/watch?v=Gh5T019483E

From a printing press.

Many countries are quite pissed at the US using this method to debase the US$. Quite frankly, it's an attempt to export high unemployment to other countries.

quote Originally posted by TiredGXP: From a printing press.

That was my understanding--just wanted to verify I read it right. They're just going to print up $600 Billion more in new currency, devalue the currency, and accept US Treasury notes in exchange?

If so, what is that going to do to the yield on those notes?

[This message has been edited by maryjane (edited 11-08-2010).]

Hello, thats the main reason why our gas prices have jumped to $3.00 + a gallon. It takes more devalued money to buy a drum of oil now. So now food prices and transport costs will go up further increasing the cost of goods to the consumer which will lead to inflation which has been somewwhat kept in check until now. Theres too much underfunded money out in circulation. What are these people thinking, did they not understand basic economics 101.

quote Originally posted by maryjane: That was my understanding--just wanted to verify I read it right. They're just going to print up $600 Billion more in new currency, devalue the currency, and accept US Treasury notes in exchange? If so, what is that going to do to the yield on those notes?

It will drive yields down, and lending rates are expected to follow. This is also supposed to free up credit, but interest rates are already so low I don't see it having much impact with lending.

And like Norm said, it'll drive up prices of everything, including oil and fuel. Anything priced in US$ will get more expensive.

[This message has been edited by Formula88 (edited 11-08-2010).]

Near zero--what's next--paying people to borrow?

After criticism for engaging in a $600 billion "quantitative easing" program, in which the Federal Reserve will buy U.S. Treasury debt, Fed Chairman Ben Bernanke has invoked the name of Milton Friedman to defend his actions.

The legendary Noble prize-winning economist is not alive to defend himself from Bernanke's claims, but his seminal book on inflation is!

More than 20 years ago, Milton Friedman penned his classic, easy-to-read book on inflation called "Money Mischief."

Today, this book reads like a prophetic warning about Obama and Bernanke policies, ones that undoubtedly will lead to massive inflation ahead and a devaluation of one's dollar-denominated investments.

Contrary to Bernanke’s assertions, Friedman argues in "Money Mischief" that the Fed’s direct purchases of U.S. Treasurys is nothing more than "pure inflation."

Friedman also explains that inflationary policies of the Fed have a "lag effect," but when they do hit, they do tremendous harm to the stock market and the overall economy.

"Money Mischief" is a must read for any investor who wants to understand how current economic policies will affect their portfolios and wealth.

It's all OK, Wall Steet is doing fine.

quote Originally posted by newf: It's all OK, Wall Steet is doing fine.

Until we get the Chinese finger because of this dumb a$$ practice of buying our own debt.
Just friggen stupid.

They are getting it from you of course.

This is a real basic scam when you break it down.

You have what they want. Money,labor,power. BUt you only have little bits of it so they figure out how to consolidate us into herds.

"They" are unions,Corporations,religions,organized crime and of course politicians.

We are all too willing so fall into any fold that promises to keep us fat and sassy.


Well a lot of us got uppity and said **** this **** we are onto you spenders and taxers. We are cutting you off. No more of this crap so what are they to do?
Easy. They will force tax you. You see we have given the Feds so much power that the laws and our rights are just a miner obstacle course.

I bet Ben Bernake doesn't 'invoke' the name of Jim Rogers.

quote Dr. Bernanke unfortunately does not understand economics, he does not understand currencies, he does not understand finance,” Rogers, 68, said in a lecture at Oxford University’s Balliol College yesterday. “All he understands is printing money.” “His whole intellectual career has been based on the study of printing money,” said Rogers, who predicted the start of the global commodities rally in 1999. “Give the guy a printing press, he’s going to run it as fast as he can.”

quote Originally posted by ryan.hess: On topic: did anyone watch Jesse Ventura's Conspiracy Theory: Wall Street?

Interesting.
I like Jesse Ventura, but when he starts talking about the subprime mortgages he glosses over the people signing up for these mortgages.
The "banks" know they can't pay it back. What about the borrower? I'm not talking about deceptive or other illegal lending practices, I'm talking about giving loans to people who cannot afford to pay it back. It takes two for that to happen, a lender and a borrower.

It's like the bank is selling rope and tells you they'll pull the rope tight if you tie it around your neck.
So, who's fault is it when you're hung? Them for giving you the rope and pulling on it - or you for putting your head in the noose?

I think he's right on the money with the derivative and securities market. That should have been expected when banks are expected to make loans that risky, they're going to find some way to mitigate that risk. There's a lot of blame in the cause of the economic meltdown and I don't believe it's so simple that it can be boiled down into "us vs. them."

quote Originally posted by Formula88: I'm talking about giving loans to people who cannot afford to pay it back. It takes two for that to happen, a lender and a borrower.

Shouldn't that be considered predatory lending? How many people do you think understand or read through the print on a loan or mortgage and trust the bank employee instead? Most of the bank employees didn't even understand what they were selling, only that they were hired to sell.

quote Originally posted by newf: Shouldn't that be considered predatory lending? How many people do you think understand or read through the print on a loan or mortgage and trust the bank employee instead? Most of the bank employees didn't even understand what they were selling, only that they were hired to sell.

Are you suggesting the bank should be responsible if a person doesn't read their loan contract before signing it?
Don't confuse the mortgage derivatives and securities market with getting a mortgage.
Homebuyers didn't deal with any of the derivatives, only the actual mortgage process.

The Truth in Lending Act has been around a while and while it is the responsibility of a lender to explain the terms, it's also the responsibility of the borrower to know what they can afford. If borrowers were deceived, then that's a potential violation of the TILA and should be prosecuted as such. If they just borrowed more than they could afford to pay back, or took out an ARM that they couldn't afford the payments on once the rates reset - how is that the bank's fault, as long as the terms were spelled out before they signed on the dotted line?

Keep in mind that banks were also pressured by the government to make a certain number of subprime loans. Lawsuits have been brought against banks that didn't make enough subprime loans before the meltdown.

quote Originally posted by maryjane: That was my understanding--just wanted to verify I read it right. They're just going to print up $600 Billion more in new currency, devalue the currency, and accept US Treasury notes in exchange? If so, what is that going to do to the yield on those notes?

PRINT ????????????

they don't need no stinking printing or paper or ink

there are no real extra new bills printed

it is all el-trick money
you can't see it
touch it
or smell it
it is just numbers in the aether

I would guess less then 1 % of money is printed
by far most of it is in paper like stocks bonds notes loans ects
or in muni funds or bank accounts

quote Originally posted by Formula88: Are you suggesting the bank should be responsible if a person doesn't read their loan contract before signing it? Don't confuse the mortgage derivatives and securities market with getting a mortgage. Homebuyers didn't deal with any of the derivatives, only the actual mortgage process. The Truth in Lending Act has been around a while and while it is the responsibility of a lender to explain the terms, it's also the responsibility of the borrower to know what they can afford. If borrowers were deceived, then that's a potential violation of the TILA and should be prosecuted as such. If they just borrowed more than they could afford to pay back, or took out an ARM that they couldn't afford the payments on once the rates reset - how is that the bank's fault, as long as the terms were spelled out before they signed on the dotted line? Keep in mind that banks were also pressured by the government to make a certain number of subprime loans. Lawsuits have been brought against banks that didn't make enough subprime loans before the meltdown.

http://www.bnet.com/blog/fi...inancial-crisis/8667
Focusing on major subprime lenders such as First Alliance Mortgage Co., or FAMCO, and Ameriquest, the book documents the elaborate and systematic schemes such companies cooked up to put people into usurious loans. Such tactics were, quite simply, criminal. They included using Wite-Out and, later, Photoshop to misstate borrowers’ income, fake signatures and otherwise falsify loan documents; lying about loan terms; steering customers with stronger credit into more expensive supbrime loans; and deceiving financial regulators and government investigators.

It’s important to understand that such conduct, far from being isolated, was in fact endemic among mortgage brokers and subprime lenders, including this nation’s biggest banks. Here’s a selection of quotes from industry insiders that sums up their business ethos:

“Every closing that we had really was a bait and switch. ‘Cause you could never get them to the table if you were honest.”
“We are all here to make as much ****ing money as possible. Bottom line. Nothing else matters.”
“Anything that benefited production — that benefited me and benefited my wallet — I’d do it.”
“It’s hard to have a guilty conscience if you don’t have a conscience.”
“I just raped this customer for 5 points and 10 percent interest!”

[This message has been edited by newf (edited 11-09-2010).]

With, or without the borrower's knowledge?

At final signing, the borrower has to look over all the paperwork and sign off on a document that confirms he/she has read and understands the terms of the loan contract.

quote Originally posted by newf: Shouldn't that be considered predatory lending? How many people do you think understand or read through the print on a loan or mortgage and trust the bank employee instead? Most of the bank employees didn't even understand what they were selling, only that they were hired to sell.

In many cases yes, it was 'predatory lending', BUT, for the most part (IMO) it goes both ways. If I make $50,000 a year I should know (via pure common sense) that I can not buy a $500,000 house, regardless of how low the teaser rate is. There were plenty of rotton banks, but there were also plenty of people who are just beyond ignorant and stupid.

quote Originally posted by newf: http://www.bnet.com/blog/fi...inancial-crisis/8667 Focusing on major subprime lenders such as First Alliance Mortgage Co., or FAMCO, and Ameriquest, the book documents the elaborate and systematic schemes such companies cooked up to put people into usurious loans. Such tactics were, quite simply, criminal. They included using Wite-Out and, later, Photoshop to misstate borrowers’ income, fake signatures and otherwise falsify loan documents; lying about loan terms; steering customers with stronger credit into more expensive supbrime loans; and deceiving financial regulators and government investigators. It’s important to understand that such conduct, far from being isolated, was in fact endemic among mortgage brokers and subprime lenders, including this nation’s biggest banks. Here’s a selection of quotes from industry insiders that sums up their business ethos: “Every closing that we had really was a bait and switch. ‘Cause you could never get them to the table if you were honest.” “We are all here to make as much ****ing money as possible. Bottom line. Nothing else matters.” “Anything that benefited production — that benefited me and benefited my wallet — I’d do it.” “It’s hard to have a guilty conscience if you don’t have a conscience.” “I just raped this customer for 5 points and 10 percent interest!”

It's important to understand that such conduct has always been illegal and should be prosecuted for fraud and violations of the TILA.
There are crooks in any endeavour. There were also people buying houses with little income expecting to flip them and turn a profit in 6 months. It worked for a while, but when housing prices started falling, they were left stuck. Whose fault is that?

And like Don said, were the borrowers aware of the falsified documents? If they were a party to it so they could get the loan THEY ASKED FOR, then they are complicit and it's not predatory lending - it's fraud on both the part of the borrower and lender.

It's easy to demonize one group and blame "them" for all of "your" problems. Reality is rarely that cut and dried.

quote Originally posted by Formula88: It's important to understand that such conduct has always been illegal and should be prosecuted for fraud and violations of the TILA. There are crooks in any endeavour. There were also people buying houses with little income expecting to flip them and turn a profit in 6 months. It worked for a while, but when housing prices started falling, they were left stuck. Whose fault is that? And like Don said, were the borrowers aware of the falsified documents? If they were a party to it so they could get the loan THEY ASKED FOR, then they are complicit and it's not predatory lending - it's fraud on both the part of the borrower and lender. It's easy to demonize one group and blame "them" for all of "your" problems. Reality is rarely that cut and dried.

I'm not trying to demonize either group, I'm sure there were borrowers that took advantage as well but in this case and many others the group that is in the power position should be held accountable IMO.

Saying that the lender should understand and look over the paperwork to make sure they understand it is like saying you should read and understand a software licencing agreement. Most people will trust their banking agent or whoever is in "charge" to tell them the what it means and where to sign, hoping that they are not screwing them in the process.

quote Originally posted by newf: Saying that the lender should understand and look over the paperwork to make sure they understand it is like saying you should read and understand a software licencing agreement. Most people will trust their banking agent or whoever is in "charge" to tell them the what it means and where to sign, hoping that they are not screwing them in the process.

The TILA act requires explaining the loan. A software agreement is one thing, but anyone who signs a loan agreement for hundreds of thousands of dollars to be paid back over several decades and doesn't read the contract is an idiot.

You can't legislate against stupidity. The bank must explain the terms clearly and in laymans terms. Beyond that they've done their due diligence. At some point a borrower has to ask themselves "hey, can I afford these payments?" Saying "most people" can't be bothered to read the contract is a cop-out. What should the bank do? Force them to read it at gun point? Maybe make them write a book report and give an oral presentation on the terms of the loan, and only if they get a passing grade will they be allowed to have the loan?

You can't hold the bank responsible for negligence on the part of the borrower. The bank can only offer the information. It's up to the borrower to make sure they understand and ask questions if they don't - and to NOT SIGN THE CONTRACT stating they understand the terms until.... THEY UNDERSTAND THE TERMS.

And this doesn't even address the huge number of loans where the borrower understood the terms, couldn't afford the mortgage and took the loan anyway.
Tons of speculators hoping to flip houses for quick profit, or ignoring the fact that their ARM will reset in 3-5 years. If someone gets an ARM that they can barely afford the payments on and the rates will reset in 3 years - what can you do beside tell the borrower, "Hey, those rates will change in 3 years. They could go up and so could your payment." How many different ways are there to say that?

The alternative is to let banks have full control and only lend to people they are comfortable lending to. That will make loans much harder to come by, as we're seeing now.
Don't tell banks they have to make loans to underqualified applicants then blame the bank for being predatory because they made loans to underqualified applicants.

quote Originally posted by Formula88: The TILA act requires explaining the loan. A software agreement is one thing, but anyone who signs a loan agreement for hundreds of thousands of dollars to be paid back over several decades and doesn't read the contract is an idiot. You can't legislate against stupidity. The bank must explain the terms clearly and in laymans terms. Beyond that they've done their due diligence. At some point a borrower has to ask themselves "hey, can I afford these payments?" Saying "most people" can't be bothered to read the contract is a cop-out. What should the bank do? Force them to read it at gun point? Maybe make them write a book report and give an oral presentation on the terms of the loan, and only if they get a passing grade will they be allowed to have the loan? You can't hold the bank responsible for negligence on the part of the borrower. The bank can only offer the information. It's up to the borrower to make sure they understand and ask questions if they don't - and to NOT SIGN THE CONTRACT stating they understand the terms until.... THEY UNDERSTAND THE TERMS. And this doesn't even address the huge number of loans where the borrower understood the terms, couldn't afford the mortgage and took the loan anyway. Tons of speculators hoping to flip houses for quick profit, or ignoring the fact that their ARM will reset in 3-5 years. If someone gets an ARM that they can barely afford the payments on and the rates will reset in 3 years - what can you do beside tell the borrower, "Hey, those rates will change in 3 years. They could go up and so could your payment." How many different ways are there to say that? The alternative is to let banks have full control and only lend to people they are comfortable lending to. That will make loans much harder to come by, as we're seeing now. Don't tell banks they have to make loans to underqualified applicants then blame the bank for being predatory because they made loans to underqualified applicants.

Who was it that told the banks they HAD to lend to underqualified applicants? Same people that played both sides, I wonder? Where was the risk?

Can't speak for anyone else but when I signed my house Mortgage papers there was 2-300 pages of legaleze that I guess I could have gone home with and tried to strggle through for a few days but I asked the lawyers assistant who I was dealing with to explain it to me as best she could, she did and I signed. If that lady had of lied or been unscrupulous I could have been in big trouble I suppose.

As far as I can understand a huge part of the subprime crisis was that the people explaining the loans didn't know (or care) to explain the loans correctly to the consumers or misepresented the loans themselves. I believe they are changing credit card agreements for just the same reason, I doubt the people that write the things fully understand it.

quote Originally posted by newf: I'm not trying to demonize either group, I'm sure there were borrowers that took advantage as well but in this case and many others the group that is in the power position should be held accountable IMO. Saying that the lender should understand and look over the paperwork to make sure they understand it is like saying you should read and understand a software licencing agreement. Most people will trust their banking agent or whoever is in "charge" to tell them the what it means and where to sign, hoping that they are not screwing them in the process.

I'm simply baffled by this attitude. If a person signs a document they don't understand, how is that the liability of the lending party? In any situation like this a person should realize that the lenders are not their friend, and aren't there to help them, they are there to make a profit. If someone doesn't understand a contract, then they should have it reviewed by someone who DOES understand it, and is there to protect their best interest. I realize that most people are too stupid to do any of that, but it doesn't immunize them from responsibility. How much grief would a lender get if they determined someone was too stupid to understand the paperwork, and denied them a loan on that basis. Would that be OK? You can't have it both ways.

quote Originally posted by Taijiguy: I'm simply baffled by this attitude. If a person signs a document they don't understand, how is that the liability of the lending party? In any situation like this a person should realize that the lenders are not their friend, and aren't there to help them, they are there to make a profit. If someone doesn't understand a contract, then they should have it reviewed by someone who DOES understand it, and is there to protect their best interest. I realize that most people are too stupid to do any of that, but it doesn't immunize them from responsibility. How much grief would a lender get if they determined someone was too stupid to understand the paperwork, and denied them a loan on that basis. Would that be OK? You can't have it both ways.

I'm baffled by yours. You say the lenders are there to make a profit and are lending to people they know can't afford it. Do you understand your credit card agreement? How are the borrowers immunized from responsibility? You might want to check who suffered the most from those bad loans, it wasn't Wall Streeet and the Banks.
Predatory loans are generally thought to be a major cause of the subprime crisis but of course it's not the banks fault they just offered people something to good to be true, it's the peoples fault for believing. And let me guess the unemployment rate is high because everyone is too lazy to work?

I'll post this again to see if anyone actually watches (mind you it is 4x45min episodes) but some good information on the financial crisis none the less. http://www.cbc.ca/doczone/meltdown/

[This message has been edited by newf (edited 11-09-2010).]

The Fed buying up 600 billion in treasury notes, that's money ptinting, plain and simple. Anyone on a fixed income or has savings in a bank is getting killed.

It's as if the Fed has backed up into a corner. They have to buy treasuries to keep interest rates low, high rates would massively increase the service on our debt. It takes more devalued dollars to buy that house so people get the illusion that they're not underwater anymore. Inflation makes people buy things now instead of waiting thus heating up the economy. I sort of see the point but on the other hand, it's like the Fed is stealing from me. They're taking the value out of the money that I have earned.

quote Originally posted by newf: Who was it that told the banks they HAD to lend to underqualified applicants?

The Federal Government of the United States. Google the Community Reinvestment Act. That's not the whole story, but it's what started it.
That's what created the "subprime" market. The who idea of a subprime loan is that it's for someone who doesn't qualify for a standard loan. That was it's purpose.

quote Originally posted by newf: If that lady had of lied or been unscrupulous I could have been in big trouble I suppose.

And she would have been in violation of the TILA (in the U.S.) and should be prosecuted.

I'm not saying banks are blameless. I just think both parties should be held accountable for their own part in the problem. Banks are being portrayed at malicious villans preying on innocent people, and while that may be true some of the time it doesn't tell the whole story.

quote Originally posted by Formula88: And she would have been in violation of the TILA (in the U.S.) and should be prosecuted. I'm not saying banks are blameless. I just think both parties should be held accountable for their own part in the problem. Banks are being portrayed at malicious villans preying on innocent people, and while that may be true some of the time it doesn't tell the whole story.

I agree with that, the banks are not totally to blame, people should have to bear some responsibility as well but as I said I think it's usually the group that holds the power (or are the ones supposedly with the better knowledge) that should be held most accountable.

When a older person dates a younger one of adolescent age I think it's the older (supposedly wiser) one who is responsible for what they do (so to speak ). Even if both parties are willing one should have the responsiblity or maturity to act appropriately, it's unfortunate that sometimes it has to be enforced.

quote Originally posted by jetman: The Fed buying up 600 billion in treasury notes, that's money ptinting, plain and simple. Anyone on a fixed income or has savings in a bank is getting killed. It's as if the Fed has backed up into a corner. They have to buy treasuries to keep interest rates low, high rates would massively increase the service on our debt. It takes more devalued dollars to buy that house so people get the illusion that they're not underwater anymore. Inflation makes people buy things now instead of waiting thus heating up the economy. I sort of see the point but on the other hand, it's like the Fed is stealing from me. They're taking the value out of the money that I have earned.

you make sense. are you running for office so that I may vote for you?

quote Originally posted by jetman: The Fed buying up 600 billion in treasury notes, that's money ptinting, plain and simple. Anyone on a fixed income or has savings in a bank is getting killed. It's as if the Fed has backed up into a corner. They have to buy treasuries to keep interest rates low, high rates would massively increase the service on our debt. It takes more devalued dollars to buy that house so people get the illusion that they're not underwater anymore. Inflation makes people buy things now instead of waiting thus heating up the economy. I sort of see the point but on the other hand, it's like the Fed is stealing from me. They're taking the value out of the money that I have earned.

but they all do it

just make up so called stock or bonds and sell them
there is no limit to how much stock they sell
or bonds

and no there is no printing or paper or ink or new money made
it is all bookkeeping fiction

quote Originally posted by ray b: but they all do it just make up so called stock or bonds and sell them there is no limit to how much stock they sell or bonds and no there is no printing or paper or ink or new money made it is all bookkeeping fiction

Does it effect inflation, interest rates or our credit rating as a nation when we do this?

quote Originally posted by partfiero: Does it effect inflation, interest rates or our credit rating as a nation when we do this?

Umm, have you seen how the dollar has been performing against other currencies?